How Long Should I Wait to Buy a Second Home?
Once a homebuyer becomes a homeowner, they face several expenses in the first year. Homeowners must purchase insurance, furnish the house, and move. Plus, they took care of the upfront costs attached to a mortgage. In many cases, a new homeowner’s finances remain tight for the first few months. If a homeowner believes that they can purchase another property, they do not have to wait to buy a second home.
Lenders keep things straightforward. They don’t take into consideration if you recently purchased a new home and want to purchase a second, per se. Instead, lenders take a look at the applicant’s finances. If the second-home buyer’s finances can withstand several lender ratios and finance stress tests, they will finance the additional mortgage.
Second-home buyers have a lot of financial leverage on their side. They went through the mortgage application process and received approval from a lender. If the homeowner waits five years, industry insiders believe it’s enough time to accrue a meaningful amount of home equity.
Home equity gives the property owner financial leverage against a new mortgage. Plus, those who improve their financial position can obtain more favourable loan terms including home loan interest rates.
Mortgage House works with investors, owner-occupiers, and second-home buyers.
Buy a Second Home Timeline Conclusion
It’s not necessary to wait to buy a second home. However, new homeowners face several expenses in the first year. Plus, it takes about five years to accrue meaningful equity in the property. To explore your options contact our loan specialists at Mortgage House today.